Is Cullum a liar?

[dylanisabaddog 4,930]

The rule of the club/company (as with any PLC) is that anyone offering to buy more than 30% of the issued share capital has to make the same offer to all shareholders to buy all of their shares.

Delia and husband own/control 60% plus of the issued shares.  They could feasibly accept an offer for 5/6ths of their holding and decline the offer for the remainder, but if they did the remaining shares would be worthless as she would not be able to use them to exercise any control and they do not pay a dividend.  Having said that, she has indicated that she will only accept an offer for all of her shares and of course all the other shareholders could do the same as well.  Many would.

With regard to the introduction of a £20m transfer kitty into the club. a previous poster is quite correct in saying that this would simply dilute the value of the shares already issued.

The share value is based on the value of the assets of the club/company (mainly land), less the value of its liabilities (mainly a bank loan)

If £20m is paid into the clubs bank account, the assets of the company increase by £20m as a banbk deposit is an asset.  Once the money is spent on players, it is gone and stops being an asset. The £20m would probably have to cover the wages of new players as well as the transfer fee, but in any case most players sign a 3 year contract and their value depreciates over that period until their contract finishes and their registration is worthless.  Therefore, once the money is spent, the asset value of the club starts to drop until it is back to where it started, unless we sell the player at a profit.  This is unlikely, as most players have an escape clause in their contract, which is how we can afford to sign Hoolihan.

At the moment the net assets/share value is about £16m.  If £20m is introduced by way of a share issue, after 2 or 3 years the asset value will be back to £20m and the share value will have more than halved, meaning Cullum (or wheover) will have lost their money.

He may therefore buy the shares required and bring the other £20m into the company as a loan. In that way he could get his £20m back if he wanted to (unless we go bust).  This would be a huge problem for the club, as the current debt of £16m would increase to £36m.

As things stand, I wouldn''t want the club to get involved, particularly as by his own admission, Cullum only attended 1 game last season.  In case you''re reading this Peter, Norwich were the team in Yellow and Green.

 

 

[Bobzilla 144]

[quote user="dylanisabaddog"]

The rule of the club/company (as with any PLC) is that anyone offering to buy more than 30% of the issued share capital has to make the same offer to all shareholders to buy all of their shares.

Delia and husband own/control 60% plus of the issued shares.  They could feasibly accept an offer for 5/6ths of their holding and decline the offer for the remainder, but if they did the remaining shares would be worthless as she would not be able to use them to exercise any control and they do not pay a dividend.  Having said that, she has indicated that she will only accept an offer for all of her shares and of course all the other shareholders could do the same as well.  Many would.

With regard to the introduction of a £20m transfer kitty into the club. a previous poster is quite correct in saying that this would simply dilute the value of the shares already issued.

The share value is based on the value of the assets of the club/company (mainly land), less the value of its liabilities (mainly a bank loan)

If £20m is paid into the clubs bank account, the assets of the company increase by £20m as a banbk deposit is an asset.  Once the money is spent on players, it is gone and stops being an asset. The £20m would probably have to cover the wages of new players as well as the transfer fee, but in any case most players sign a 3 year contract and their value depreciates over that period until their contract finishes and their registration is worthless.  Therefore, once the money is spent, the asset value of the club starts to drop until it is back to where it started, unless we sell the player at a profit.  This is unlikely, as most players have an escape clause in their contract, which is how we can afford to sign Hoolihan.

[/quote]

All technically correct. However, you have not factored in the ''premiership'' factor. If NCFC remain in the championship, then the argument over value is rather academic. However, if NCFC can become, and remain, a premiership side, then additional value will be brought into the club through TV rights. The season after our promotion was highly profitable, as was the season after relegation. If that profitability can be maintained (i.e. by getting further in competitions, getting TV revenue from Premiership etc.) then the value of the investment goes up. That is how the big clubs survive - i.e. the value of TV rights pays for their transfer budget. Only the spanish clubs can survive on their marketing income, and that is largely due to the far east market - that is why Beckham was so expensive for Real Madrid - he was an established brand in the far east.

[dylanisabaddog 4,930]

Sorry to bother you all again, but I have thought of a simpler way of explaining this.

Assume your house is worth £200k  I will give you £100k for half of it on the understanding that I spend £20k on a new kitchen and bathroom.  You won''t be allowed to live in the house any more and you won''t get any say in which kitchen or bathroom I buy.  The kitchen and bathroom  may increase the value of the house slightly in the short term, but in the long term they will make no difference to its value.

The only way you will ever get the other £100k is if someone agrees to buy the house from me.  This won''t be for at last 10 yeras, which is when I will get bored with it or when my wife (bless her) leaves me because I spend all my time worrying about Norwich City.

Have we got a deal?

[A Load of Squit 5,167]

Nobody is lying, theres a bit of ''arm wrestling'' going on, thats all.

 

[Rum Ol Boy 0]

[quote user="A Load of Squit"]

Nobody is lying, theres a bit of ''arm wrestling'' going on, thats all.

 

[/quote]naked arm wrestling?[:S]

[nutty nigel 7,537]

[quote user="Canary Nut"]

An Extraordinary General Meeting (E.G.M.) would be called and resolutions voted on.

[/quote]

And would existing shareholders have to underwrite the new issue? I am confused Canary Nut, maybe it''s because I am a part-time bingo caller and toilet cleaner that these issues are beyond me. I know about "2 little toilet ducks" though [:S]

 

[nutty nigel 7,537]

[quote user="rum-ole-boy"][quote user="A Load of Squit"]

Nobody is lying, theres a bit of ''arm wrestling'' going on, thats all.

 

[/quote]

naked arm wrestling?[:S]
[/quote]

[:''(]Rickyyyyy....

Is that you?

 

[Castle Acre Canary 0]

[quote user="lappinitup"]

On Monday , the EDP reported Cullum as saying.......

"He said he wanted to become majority shareholder, supported by Delia and her husband Mr Wynn Jones, and possibly make some changes to the board, including appointing “someone from the supporters'' club".

In this mornings EDP he is reported as saying this......

"My investment is focused on buying new players to give Norwich a fighting chance of returning to the Premiership. As I''ve always said it''s not my intention to buy Delia''s shares or to pay off the club''s debt".

My question is, how can he become the majority shareholder without buying D&Ms shares?

[/quote] Easy by the club issuing £20mn of new shares at £30 a share would give him around 52% of all shares in issue. This way Delia is diluted to around 30% and probably the banks would be happy for their loans to stay in place as the company has just had a £20mn equity injection. If the new issue had a clawback for existing shareholders to subscribe for new shares at £30 then the offer for all shares could be avoided in the City Code. It would then only need the existing £4mn of other loans to remain in place and we have £20mn in the kitty. Say a third for acquisitions and two thirds for their wages.

[dylanisabaddog 4,930]

This relies on Delia agreeing to a new share issue.  Highly unlikely.  Unless I am very much mistaken, she is not going to walk unless she gets her money back. 

[Mr.Carrow 376]

[quote user="dylanisabaddog"]

This relies on Delia agreeing to a new share issue.  Highly unlikely.  Unless I am very much mistaken, she is not going to walk unless she gets her money back. 

[/quote]

If this is the case then she most certainly did lie when she said that she wasn`t interested in the money and the most important thing was cash for new players.

On your earlier lengthy post, i think your analysis is very close to the mark but i have to take issue with a couple of points.  Firstly your assumption that the new money starts to devalue as soon as it is spent on players ignores the fact that we have sold plenty of players for a profit in recent years- Ashton, Francis, Jonsson, Green, Mckenzie, Etuhu, Earnshaw, Brown, Lewis etc.  Etuhu and Earnshaw both had release clauses but both were sold for a profit.  Also, on the face of it we have about a 15% chance of winning a promotion worth £50m to the Prem.  £20m invested in the team would significantly improve those odds and is very likely to bring in extra revenue from cup runs, play-offs, higher merchandising/sponsorship, tv revenue etc.

The longer we struggle at the wrong end of this division the more share value will diminish anyway and relegation would probably lead to Delia bailing out for well below what she put in.  The picture if Cullum walks away looks very bleak IMO and i think that, for the good of the club, Delia has to compromise.

[InLambertWeTrust! 0]

[quote user="Unlucky Fried Kitten"]NO[/quote]

Really productive answer. Well done

[Hog 0]

[quote user="C.T"]

[quote user="Unlucky Fried Kitten"]NO[/quote]

Really productive answer. Well done

[/quote]

 

Damm he stole my answer!

[Barclay_Boy 0]

No (you have asked what is technically called a "closed question")

[Big Down Under 0]

Can we just stop all this rubbish accusing people of lying? I don''t think its at all helpful.Cullum never said he was bidding for Delia''s shares.He only ever talked about 20m for players.Delia has seemed pretty clear to me, if someone who meets her criteria offers to buy her out so she can take her money back, she will accept. Nobody has done this yet.It is not in Delia''s interests for a new share issue, I don''t think it is in the club''s best interest either. This club has been divided for too long now, we need unity. Having a split board under Cullum''s control wouldn''t help. He should buy out Delia and stop trying to get control of the club on the cheep.